gdp output economic growth pollution

When Gross Domestic Product rises, rejoice?
health natural capital human welfare measure indicators

Lose your savings -- Does a higher GDP offer comfort?

If we care about people smoking, why not think about social isolation too? The health effects of social isolation are of the same magnitude as smoking. And material security -- which a fair economic policy could deliver to us all -- could help us solve both mental problems. This 2010 op-ed is from CoExist, a group of people and organizations who believe that true and lasting peace can only be sustained when economic, social, and environmental justice have been achieved.

by Pippa Bartolotti

One barrier to progress is that statistical agencies around the world are run by economists and statisticians. Government often mistakes economic activity for its citizens’ well-being. When Gross Domestic Product (GDP, a nation’s economic output) is up, we are supposed to rejoice because greater output increases our chance to get a share of it; when GDP is down, we are supposed to be gloomy. Yet when someone loses their home or savings, a statistic like GDP offers little comfort.

Not all of a nation’s output has value. Some it imposes a cost. Because industrial byproducts -- pollutants -- hobble the workforce, it is logical to subtract from GDP the cost of health problems -- asthma and early deaths for instance, caused by air pollutants like sulfur dioxide we breathe in every day.

Even if GDP was revised and updated, the tendency may still be to equate economic growth (a rising GDP) with progress on a planet that is already overburdened by human consumption and pollution. A different approach is needed.

Measuring output alone is not the best way to identify human progress and repair imbalances in the economic and environmental systems we devise. One measure that challenges growth-centric thinking is the Human Development Index. The HDI incorporates a nation’s GDP and two other modifying factors: its citizens’ education, based on adult literacy and school-enrollment data, and its citizens’ health, based on life-expectancy statistics. The HDI, which happens to be used by the United Nations, has plenty of critics, but it is at least a start. click here

A dire omission to the information gathered today is the amount of “natural capital” (stocks of clean air and water, biodiversity, etc.) we need to conserve to maintain our economies and our quality of life. If we push the world’s natural capital below a certain level, we may so radically alter the ecosystem that it’d impact on human welfare and even survival. If we were to pass that point -- and at present we have no measurement to indicate whether we already have -- then we couldn’t compensate for our error through technological innovation or energy breakthroughs because by then it would be too late.

It may be hard to put a monetary value on alteration of global climate, loss of species, and the consequences that might come from those, but surely not impossible. We have to decide to measure something, however difficult, before we can come up with a technique for measuring it.

A new measure should account for carbon emissions and build in a depletion charge for the natural resources such as oil, gas, timber and fisheries. For the details being worked through by Joe Stiglitz and others, see click here

It has been suggested that a ‘dashboard’ of indicators would better do the job and lead to very different policies from those we have now. The dashboard in your car gives you several pieces of information at a glance. It is no good knowing that your oil pressure is OK if you have run out of petrol. Similarly it is not enough to know that manufacturing output is up if the health costs of maintaining your workforce have gone through the roof.

The health effects of social isolation are of the same magnitude as smoking. If we can care about people smoking, because that reduces their wellbeing and life expectancy, then why not think about social isolation too?

Wellbeing is important to measure as it has been estimated that the 10 percent of people who spend the most time suffering account for almost half of the total amount of suffering. Huge social and economic gains could therefore be made by dealing with mental-health problems, such as depression.

Happiness should be measured, too. Such a measure could enable a more enlightened perspective on the complex relationship between happiness and money.

JJS: We could quit serving the economy and have it serve us, so money would not be such a roadblock to happiness. What we’d have to do is share money. Not all of it, just the commonwealth.

What is this social surplus? It is all the money we spend for the nature we use, our community’s spending for land, resources, EM spectrum, ecosystem services, and for government-granted privileges. And at the same time, we’d quit the forced “sharing”, via taxation, of our individual wealth, of the money we make by applying our labor and capital. This shift of taxes off the values we create, while charging for the values we take, is the revenue-raising half of geonomics.

The spending half of geonomics is to eliminate subsidies to special interests that tilt the economic playing field and instead from surplus public revenue pay citizens a dividend, a la Alaska’s oil dividend. Everyone receiving a material cushion in the form of a Citizens Dividend check each month would remove one of our biggest worries in life -- money, or the lack thereof. We’d have to find something else keep us from being full-time happy, and we could lose GDP in favor of a new indicator -- leisure.

And if you think geonomics has merit, the tax part of the reform is cited in the comments at the New York Times by Wyn Achenbaum. You could help spread the word by adding a "recommend" to her remarks. click here

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Editor Jeffery J. Smith runs the Forum on Geonomics.

Also see:

World's rich got richer, so how about a break?
http://www.progress.org/2010/recovery.htm

The largest program of its kind in the world
http://www.progress.org/2010/brazil.htm

Convenience and Hindrance in One
http://www.progress.org/2010/happy.htm

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